Budget 2012: Implement 4% VAT on all electronic components and assemblies, says FICCI

Finished electronic equipment import should be subject to at least 5% Customs Duty to encourage local manufacturing.

By Agencies | Updated: Feb 29, 2012, 04.28 PM IST

Following are the key recommendations necessary for revival and healthy growth of the electronics components and equipment manufacturing sector:

>> Zero duty on all inputs for manufacture of electronic components and parts, including dual use inputs; necessary to avoid inverted duty.

>> Implementation of GST expeditiously with 12% GST.

>> 4% Vat on all electronic components and assemblies as these are industrial inputs.

>> In case of any delay in implementing GST, Zero CST on electronics value chain be made applicable.

>> 10% Excise Duty should be retained, considering the fragile global economic recovery.

>> 4% SAD should be abolished.

>> Finished electronic equipment import should be subject to at least 5% Customs Duty to encourage local manufacturing.

>> Mandate local content in key sectors such as telecom, rural IT infrastructure, e-governance projects (similar to 30% under DOFA in defence sector) and in special giveaway schemes such as the Tamil Nadu Government scheme of donating TVs.

>> No need to include electronic components and parts in any future FTA's.

>> Streamline excise procedures on import of inputs/raw materials for electronic components at 0% to equate with import of finished components without any procedural hassles.

>> Policy for encouraging local manufacture of champion products such as CFLs, Solar Lighting, Mobile accessories (Chargers) etc. Simple products required in large quantity with high employment potential.

>> For Electronic Components and Parts that have high value addition - Allow manufacturers to retain Excise Duty paid through PLA as interest free loan for 5 years.

>> Promote hardware manufacturing zones - clusters.

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